Majority of Netflix subscribers to be outside US by 2018, IHS Markit says
Aug 24, 2016
Territory expansion pushes subscriber numbers towards 100 million mark
LONDON--(BUSINESS WIRE)--By 2018, the number of international Netflix subscribers will overtake the number of US domestic subscribers, according to new analysis released today by IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.
“At the moment, Netflix has 79.9 million total paying subscribers,” said Irina Kornilova, Senior Analyst at IHS Technology. “By 2018, international subscribers will overtake the number of subscribers in the US for the first time, and by 2020, Netflix will have 75 million international subscribers.”
The total number of Netflix subscribers grew 30 percent between 2014 and 2015 and is forecast to grow 21 percent in 2016 as territorial expansion reaches its peak, IHS Technology says. By 2018, Netflix will break the 100 million-subscriber mark. The number of Netflix International paying subscribers will grow 38 percent in 2016, with more than 2.8 million of these new paying subscribers coming from the new markets that Netflix launched in at the beginning of this year.
By 2020, Netflix global revenues are expected to reach $13 billion, with 53 percent accounted for by Netflix International markets. Domestic streaming revenues are expected to hit $6.2 billion by 2020, and international revenues to reach $7 billion.
At the end of 2016, unsurprisingly, Western Europe, with strong UK (over 6 million subscribers by the end of 2016), Netherlands and Nordic (5.4 million subscribers combined) markets, will be the leading region for Netflix outside the domestic US subscriber base, the report said. Germany, despite strong competition from Amazon Prime and free TV, is expected to reach 2.2 million paying subscribers by the end of 2020.
Netflix plans for localised success
The ‘soon to be localised’ markets of Poland and Turkey will drive further uptake in the Central Europe region, but the effect of the localisation will not be felt immediately, IHS Technology says.
“With the worldwide launch, Netflix has launched a platform upon which it can build and differentiate the service to fit specifics of every region in the future,” Kornilova said. “Netflix is starting this localisation process in Poland and Turkey this year. Subscribers in these countries can expect an addition of local languages to the user interface, subtitles and dubbing of content. This will help drive new subscriber numbers dramatically.”
Netflix will continue with localisation and development of new territories through 2017 and 2018. As a result the new territories are forecast to grow their paying membership base by 133 percent and 62 percent in 2017 and 2018, respectively. By 2020, subscribers in countries rolled out in 2016 will represent a quarter of all international subscribers, reaching 19 million.